Venture capital began as a game for swashbuckling risk-takers backing visionaries with conviction. But success always attracts imitators. When college endowments and pension funds started chasing higher returns, money flooded into VC, diluting both performance and standards.

Every technological wave, from semiconductors to PCs to the Web, mobile, and now AI, brought its own gold rush. But ZIRP (zero interest rate policy) changed the industry more than any innovation. Cheap money sent assets under management soaring, creating a glut of capital chasing a shrinking pool of viable opportunities.

The Power law became gospel: one breakout win would pay for every loser. Instead of fostering thoughtful, thesis-driven investing, it fueled herd mentality, FOMO, and check-writing without discipline. Many VCs abandoned their supposed principles, if they had any at all.

What did this produce? An ecosystem crowded with failed executives, failed founders, and failed operators. People with pedigree or privilege, not necessarily hunger or originality. Capital went to anyone who could pitch. When 2% management fees are guaranteed, the 20% carry becomes optional upside. For many, it was an afterthought.

The result was predictable: vanity metrics, apathy, mediocrity, and empty promises. VCs tying bonuses to dollars deployed. Founders chasing the next round rather than customers. Everyone pretending this was value creation. 

Entrepreneurship is living a few years like no one wants to, so you can live the rest of your life like few can. But when every wantrepreneur with a SAFE and business plan could secure funding, the number of ventrepreneurs shot up, having signed their death warrant, just unaware of it. Entrepreneurs, focused on the big picture, often overlooked the fine print. Lawyers were transactional and not always aligned. Many founders learned the hard way the saying: “Your valuation, our terms.” 

My advice: bootstrap. Build discipline-first businesses. Despite earnestly seeking VC early on, once we hit product/market fit (or in the content racket, platform/format fit), we didn’t need it. WatchMojo’s ROI and IRR on my initial seed investment went on to trounce the returns of VCs & PE firms in our peer group, who all pivoted way too many times, burned way too much capital, and ended up with little to show for it. Had I raised any funding early on, there’s no doubt that it would have killed us, too.

From VCs to PE

Private equity emerged from the ashes of the Great Recession. As liquidity dried up, a cottage industry of PE funds took shape, not as risk-taking growth capital, but as bankers & lenders in investors’ clothing. They found a way to put capital to work, earn fees, and hope for carry if things went well.

When Covid hit and half the industries became untouchable, the demand vs supply dynamics dramatically tilted in our favor, so I revisited bringing on outside partners, knowing the post-Covid surge in home entertainment consumption would allow me to offer (and be offered) fair and reasonable terms. I did not take any private equity until 2021, and only when I no longer needed it. Yes, the financials were enticing, but being a bit of a contrarian, I wanted to reinforce governance and add safeguards to my own swashbuckling, risk-taking ways (real entrepreneurs jump off mountains & look for a parachute on the way down). 

“How Can We Be Helpful?”

Investors often give you an umbrella when it is sunny and want it back when it is raining (sometimes, the mere sight of a cloud). So whereas you bring on outside capital to boldly go where no one has gone, you actually end up being boxed in. Investors are ultimately risk-averse.

Seeking to pay it forward, I began to invest in more startups myself, I increasingly heard investors ask entrepreneurs: “How can we be helpful?” I never saw anyone actually help, and when the road got rocky, investors looked for their own parachute to bail. It made me hate investing – not because of startups, entrepreneurship, or investing, but because these emperors wore no clothes. It was all talk, all bravado, all hype and bullshit. 

With the end of ZIRP, the game changed, and that high flying era is over. Warren Buffett would say that you don’t know who’s swimming naked until the tide goes down. Well, we’re about to find many Patagonia-wearing, pantless investors roaming the streets.